Rethinking retail strategy
by Claudia Ferguson. Digital marketing and social media have opened up the spectrum for new markets outside of geographic location, new customer targeting and more engagement, but they have also brought about more scrutiny, a demand for responsive service and the need for a clear(er) strategy.Friday, 31 Jan 2020
by Claudia Ferguson. Bricks and mortar, online or pop up, one thing is certain – as a whole, the retail industry has undergone significant transformation over the last few years. In fact, it continues to evolve as consumers are demanding more than ever, and price is no longer a guaranteed strategic play, which means that standing out from the noise is becoming more difficult. And if we are honest – there is a lot of noise!
Digital marketing and social media have opened up the spectrum for new markets outside of geographic location, new customer targeting and more engagement, but they have also brought about more scrutiny, a demand for responsive service and the need for a clear(er) strategy.
Traditional approaches to retail strategies may not necessarily suit the changes we are seeing in consumer behaviour, nor the economic market, and as a result, many businesses need to rethink their strategy in 2020 if they don’t want to be left behind. What’s more, given that the sector is likely to face another year of almost no economic growth and weak spending – this has become more critical.
Finding a strategy that works for you is very much dependent on your business model, who your customers are and what you are looking to achieve. It is also important to acknowledge your satisfaction with your current product/service positioning – being brutally honest about whether it is a true reflection of your brand, whether it’s different from your competitors and whether its going to help you realise the growth potential you are looking for.
These are three strategies to explore:
1. Redefine service and experience
Retail is a highly saturated marketplace and while price can be used as a differentiator, if we are honest, it’s not sustainable. In fact, constant price cutting and relying on discounts to set yourself apart, means lower margins and a quick spiral towards business distress. Providing outstanding customer service and creating memorable customer experiences, however, can be a tipping point for growth.
Today consumers are savvier than ever before, they know what they want, and chances are they have already done their research. The product is in fact usually secondary – where service and experience are frequently the swaying factor, if not the deciding one. In fact, most consumers would rather pay a little more for convenience, excellent service and an experience they would be happy to repeat – which makes consistency critical.
We know that the first purchase or interaction is the best time to earn loyalty so how you redefine service and experience needs to be a well thought through effort and as a result, it doesn’t happen overnight. Use technology, be creative, think interaction and focus on staff to truly bring a memorable experience, a personal touch and a level of engagement and service that surpasses the norm and client expectations – after all, great service never goes out of fashion.
2. Bring social consciousness to the fore
There’s a famous quote that says: “If you don’t stand for something, you will fall for anything” – but in the world of brands and retail, for me it should read: If you don’t stand for something, you will fall for nothing. Sustainability and corporate social responsibility are becoming increasingly important to customers and those socially conscious brands have an edge with the consumer. With relationships between brands and consumers becoming more personal, more engaging and more direct, there is an innate need from consumers to associate themselves with brands that align with them on similar values.
These values – whether planet or people focused – need to be true and authentic. It must permeate through every fibre of the brand and become part of the brand’s DNA. 91% of consumers would rather buy from an authentic brand and customers who have an emotional connection with a brand have a 3x higher lifetime value – the predicted net profit attributed to the entire future relationship with a customer. And any retailer worth their salt knows that keeping existing customers is easier than acquiring new ones – so making sure current customers are serviced well and are connected to the brand – authentically – is critical for sustainability and ultimately, growth as word of mouth remains a powerful tool.
3. Data is everywhere – use it to get personal
The amount of data created each year is growing – in fact, it is estimated that in 2020, every human on the planet will be creating 1.7 megabytes of information each second! It’s a crazy figure to wrap your head around and even crazier to understand how to use that amount of customer information in your business. Big data strategies make this possible – it helps to identify trends and patterns and can provide insights into not only your customers, but your competitors as well.
Historically, retail data was defined by three key factors: volume, velocity, and variety – with loyalty cards being the most common way information was collected. Today there is a world of ways to get information, including credit card transactions, IP addresses, log-ins and cloud-based aggregated solutions.
Using data correctly allows better insight into customer behaviour – the more you know about your customers, the more you can target and engage them. Customer recommendations based on their purchase history can result in a more personalised shopping experience – which could also become an element in how you redefine your service and experience. Understanding what customers are looking for, what values are important to them will also help you bring social consciousness to the fore – one that works for both you and your clientele. This of course means that delivering the right message at the right time will help you to build the connection your customers are looking for and develop a journey that works for them. And its not just about getting a 360-view of your customers and enhancing service, big data can also assist in optimising your pricing strategy and streamlining the back end. The better the quality data, the better the ability and effectiveness of your decision making.
There is a seamless expectation happening between online channels and brick and mortar stores – customers are wanting more no matter where and how they shop. In fact, they are demanding it and if your store is not offering products and promotions that are uniquely tailored to their preferences, values and habits, they will find one that does – and there is no shortage of choice. It really won’t matter how skilled or creative your communications or social media strategy is, if it doesn’t resonate with your audience – at the right time – it will merely become part of the clutter of data and noise out there. And boy is there a lot of data and noise out there.
Technology, hyper-personalisation and values-driven consumers are changing the game. Retail is moving from transaction to service provider. How are you taking up the challenge and staying competitive? How are you taking the time to understand your audience – not to merely sell, but to listen. So, if you truly want to operate with your customers’ best interest in mind, take time, invest in the right strategies and make sure your brand is around for the long haul.
With over a decade of experience in the industry, Claudia Ferguson, has an impressive consulting career and her fair share of industry stories to tell. And she does exactly that – tell brand stories, backed by strategy and high-level consulting – all focussed on impact. She believes in the power of the African continent, the value of insight and experience and the importance of relationships on the continent and beyond its borders. She thrives on challenge and as a Business Director at Orange Ink, her responsibilities include strategic business development for the agency and its client portfolio.
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